UK giga-project runs out of road

As Energy Storage Journal went to press Britishvolt, the company behind one of the UK’s flagship gigafactory projects collapsed into administration.

On January 17, Dan Hurd, Jo Robinson and Alan Hudson of EY-Parthenon’s Turnaround and Restructuring Strategy team were appointed joint administrators of Power by Britishvolt Limited — incorporated in 2019 as the main UK company in the wider Britishvolt Group set up to build and operate the plant.

The move was due to insufficient equity investment for the research the company was undertaking and the development of its sites in the Midlands and the north east of England, according to the administrators.

Hurd said the priorities were to protect the interests of creditors, explore options for a sale of the business and assets and to support the impacted employees.

However, most of Power by Britishvolt Limited employees have been made redundant. No other entities in the Britishvolt Group, including a number of UK entities, are in administration.

The omens had not been good for some time and came to head on November 2, when Britishvolt confirmed it had received an undisclosed cash injection, after reports that the lithium batteries start-up was on the brink of collapse.

Company CEO and president of global operations, Graham Hoare, also revealed that top executives would be working “without pay for the next month or so, while an overwhelming number of employees had volunteered to take substantial pay cuts”.

The identity of the investor that had provided short-term bridging aid remains confidential.

Speculation about the firm’s future had mounted after the UK govern- ment reportedly refused a request for an advance on promised state funding, said to be worth £100 million ($115 million).

The Department for Business, Energy and Industrial Strategy declined to comment when contacted by Energy Storage Journal

CEO Hoare said the funding would be available to draw down in 2023.

The financial crisis came just months after Britishvolt lost its second CEO in the three years that the project had been underway. The departure of Orral Nadjari, a co-founder of the company, was announced on August 20 but no reason was given for his leaving.

Nadjari founded the company with former CEO Lars Carlstrom, who had stepped down in December 2020.

Carlstrom went on to launch a namesake but entirely separate gigafactory project in Italy, Italvolt, of which he is now CEO.

Ironically, the collapse of Britishvolt came after the UK government announced a new post-Brexit subsidy control system, which came into force on January 4 and which scrapped the “restrictive aid scheme the UK was subject to as part of the EU”.

Previously, the EU would regularly block local authorities and others from delivering funds to businesses “that most needed it in their communities”, the government said.

Work began on building Britishvolt’s facility in northeast England in September 2021. The total investment cost was put at an estimated £3.8 billion ($4.3 billion).

Curiously, former Conservative opposition leader and now member of the House of Lords, William Hague, blamed Britishvolt’s failure on Brexit at this January’s World Economic Forum in Davos Hague said that such projects “need scale and access to a big market”. However, one industry commentator told Energy Storage Journal at the time: “If that were the case, why is the EU saying its giga projects could also be at risk?”

International

Britishvolt had agreed a number of deals and partnerships over the past year and the demise of the company will have an impact on other international firms.

Last February, Britishvolt said it had secured the further backing of an existing investor, mining giant Glencore, to launch a £200 million ($270 million) funding round.

The gigafactory developer announced on May 24 it had signed a sales purchase agreement to acquire German battery cells producer EAS Batteries from the Monbat group, in a cash and shares deal worth €36 million.

And on June 7, Britishvolt said its plant would use large scale production lines from Swiss manufacturer Bühler for the production of electrode slurries for the first go-to-market phase of 4.8GWh, which would be expanded to 38GWh towards the end of the decade.